Are travel cards with high annual fees worth the money?

When the pandemic hit, expensive credit cards tailored to frequent travelers had to pivot quickly to non-travel perks or risk losing customers who were paying hundreds of dollars in annual fees to earn benefits and rewards geared toward going places.

JPMorgan Chase, Capital One and other premium credit card issuers loaded up on partnerships with companies focused on life indoors. “When the pandemic first hit, it felt like every travel card was piling into everyday benefits — groceries and also things like streaming services, food delivery,” said Ted Rossman, a senior industry analyst for 

Now, with travel and entertainment booming, high-fee cards, including Chase’s Sapphire Reserve ($550 annual fee), Capital One’s Venture X ($395 annually) and American Express’ Platinum card ($695 a year) have returned to offering their most lucrative rewards to those who don’t stay home. 

It’s hard to know how much of the $164 billion credit card industry belongs to premium travel cards. Issuers don’t break out their data. But overall, “we’re seeing pretty sharp increases in both spending on the cards in the travel sector, as well as redemptions for travel,” said John Owens, the general manager of Elan Credit Card, a division of U.S. Bancorp that runs credit card programs for 1,300 community banks and credit unions. 

For certain frequent travelers, high-fee cards can easily pay for themselves and be worth much more than their triple-digit fees over the course of a year. The challenge for the uninitiated is to get beyond the glossy marketing, the perk sprawl and the sheer allure of spending, to weigh the benefits against the costs.  

“Reward centers in the brain that are sensitive to pleasure are specifically activated by the possibility of purchasing something with a credit card,” said Drazen Prelec, an economics professor at the Massachusetts Institute of Technology’s Sloan School of Management. “If you use the card for happy experiences, that card acquires some of the associations with the purchases you’ve made. … That gives it kind of a psychological glow.”

That glow is one reason travel cards, with their promise of easy luxury, exotic locales and rich incentives, can feel a lot more enticing than getting cash back on a trip to a big box store with a no-fee card. 

The most visible and common incentives are rewards points, which are ladled on by the thousands and can be worth hundreds of dollars. American Express, for instance, is offering a signing bonus of 100,000 points for the Platinum card. The Sapphire Reserve card comes with 50,000 points. The Venture X comes with 75,000 reward miles. Certain airlines have

Rewards points are “what I like to call a buffer currency,” Prelec said. “It doesn’t feel like you’re spending money.”

Even if it did, it could be hard to determine how much. 

Points have traditionally been valued at a penny apiece, but now their worth can depend on a host of factors, and because plans have become so complicated, using points to pay for airline tickets and hotel rooms, for instance, can be like chasing moving targets. 

Credit card companies prefer to keep cardholders in their ecosystems, and typically reserve the maximum rewards points, as well as the highest possible “exchange rate,” for travelers who book through their proprietary portals. Take Venture X’s 75,000-point signing bonus, for instance, is worth $750 when used toward flights, hotels and other services booked through Capital One’s travel portal. If the cardholder wants to trade the points for a statement credit or check and spend the reward outside the portal, they’re worth $375. 

Another powerful selling point for travel cards is an annual credit for travel purchases. The Sapphire card credits users a total of $300 at the end of the year for anything that qualifies as a travel expense. Venture X also offers a $300 annual travel credit, but the travel has to be booked through Capital One’s portal, “which is a little bit of a stumbling block for some people,” said Rossman of 

This is why partnerships can sometimes be as important as points, when it comes to calculating the value of a card. Some travel cards partner only with certain hotel chains or airlines, which can affect the value of the cards themselves, as well as the cardholders’ ability to take advantage of other perks connected to particular airlines, like free baggage fees, upgrades and access to airport lounges. 

Travelers who prefer to book directly with hotels or airlines or prefer to use third-party channels like Travelocity also might not derive as much benefit from the cards as people willing to use the issuers’ travel portals, where similar discounts may not be available. 

To attract younger users, and retain existing ones, card companies have also added restaurant programs, with benefits including first dibs on reservations at certain trendy restaurants in big cities or pop-up events featuring famous chefs. “I think these cards are catering to a more affluent young professional type, the kind of people who tend to eat out a lot,” Rossman said. 

But dining perks are mainly a way to score bonus points, or to use them, and they may not directly defray the cost of the card. Also, they’re frequently available in some form with cards that have lower annual fees, or none at all. 

And for premium travel cards, the fees aren’t the only higher costs. According to, the current annual percentage rate for a rewards credit card is 16.17 percent, compared to 13.28 percent, on average, for low-interest cards.  

“If people pay more for something, they are more likely to use it,” said Ali Besharat, an associate professor of marketing and co-director of the Consumer Insights and Business Innovation Center at the University of Denver. They see it as a “justified expense,” he said.